Energy News Monitor | Volume XIV; Issue 34

POWER FOR ALL TO GET VOTES FROM ALL

Power News Commentary: December 2017 – January 2018

India

By March 2019, all homes in the country will be provided uninterrupted 24-hour power supply throughout the year. By December 2018, 1,694 villages, which are yet to be electrified, will have electricity connection and works in this regard has been going on. It is likely that the date set for declaring full electrification coincides with the date set for elections. A new law will be enacted to impose penalties on power distribution companies in case of failure to provide uninterrupted power after March 2019, except due to technical reasons. The government has set a target of reducing the T&D losses of power from the current 21 percent to 15 percent by January 2019. ₹ 1.75 trillion is being spent to improve the power infrastructure across the country.

All 39,073 villages of Bihar were said to be electrified. Every household in the state would have a free power connection by the end of the next calendar year. The efforts in this regard were a part of the seven resolves ("saat nischay") of good governance. The turnaround in the power situation was achieved through a number of reforms, as a part of which "the state electricity board underwent a major revamp and a number of government-run power companies were set up". Bihar will pitch for increase in budget allocation of centrally-sponsored schemes, uniform power purchase tariff for all states and commencement of financial year from January 1 among several other provisions for being included in the upcoming Union budget for the fiscal 2018-19. Bihar had also pitched for uniform tariff rates across the country on the lines of railway fares.

The government is working on amendments to the Electricity Act to levy hefty penalties on power distribution companies for load shedding and make provisions for direct subsidy transfers by states to power consumers. The Union power ministry is aiming to introduce the Electricity Act amendment bill in the budget session of parliament. At present, the Act fixes universal service obligation on distribution licensees to provide electricity to all applicants and the penalty for non-compliance can extend to up to ` 1,000 per day of default. The amendments are proposed in the Act to explicitly fix 24x7 power supply obligation on electricity distribution licensees. The bill will also provide for subsidy transfers from state governments for power consumption directly to the consumers, on the lines of cooking gas cylinders. Industry experts said a DBT (Direct Benefit Transfer) like structure in power distribution sector would help revive the discoms. But the scheme may face challenges in implementation as net electricity metering is not prevalent in rural areas. The roadmap for one of the most awaited reforms in the power sector by enabling electricity consumers to choose their supplier is also likely to be provided in the bill. However, the bill may not impose timelines for implementation of the proposal as that has been opposed by states. The states may, however, be asked to notify their plans for implementation of the reform for electricity connection portability in the next 3-5 years. The proposal, to separate electricity supply and network maintenance services and introduce multiple licensees for a single area by amending the Electricity Act 2003, has been in works for last many years. The UPA government had in 2014 introduced a bill to this effect in the Lok Sabha. The proposal is similar to mobile number portability where consumers can switch to a telecom operator of their choice. Currently, power distribution utilities are responsible for operating and maintaining distribution system in their licensed areas.

The ₹ 6,000 billion, 24x7 power supply promised to the agriculture sector from January 1 in Telangana is a pioneering move with far-reaching consequences politically and financially, with potential to rejuvenate the rural economy. From a deficit of about 2,000 MW when the State was formed in June 2014, to be in a position to supply 24x7 power to all industries, and now round-the-clock free power to farmers from the Rabi season, is a creditable achievement. However, the impact of free power on the State’s finances, and the health of the discoms, needs to be closely watched. The State utilities have invested ₹ 12,316 billion to strengthen the transmission and distribution system for 24x7 power supply. The discoms will have to contend with additional agricultural demand of 9,765 million units in FY18. Two discoms have made projections that in FY19, the revenue demand will be ₹ 35,774 billion, against a revenue generation of ₹ 26,003 billion, leaving a gap of ₹ 9,771 billion. To bridge the revenue gap, the government will have to significantly increase the budgetary support to keep the discoms financially healthy.

As many as 13,254 houses were given electricity connections in Western UP in a single day under 'Saubhagya' scheme. The districts where the connections were given include Meerut, Baghpat, Ghaziabad, Bulandshahr, Hapur, Gautam Budh Nagar, Saharanpur, Muzaffarnagar, Shamli, Moradabad, Sambhal, Amroha, Rampur and Bijnor. Out of the total houses, 2,372 belonged to BPL families. The connections were given for free during 464 mega camps set up across West UP. Pradhan Mantri Sahaj Bijli Har Ghar Yojana 'Saubhagya'-- an ₹ 163 billion scheme of the central government-- aims to provide power connections to over 40 million families in rural and urban areas by December 2018. As many as 464 mega camps were set up in 14 districts of West UP, and a report of the number of electricity connections was made public. Paschimanchal Vidyut Vitaran Nigam Ltd (PVVNL) managing director Ashutosh Niranjan had conducted inspection of the mega camps. While the BPL customers will not have to pay for the electricity connections, ₹ 50 per month will be taken from APL customers in 10 easy instalments.

Asserting that the flagship schemes have been launched to achieve round-the-clock power supply for all by 2019, the Jammu and Kashmir (J&K) government said it was actively pursuing with the Centre the transfer of power projects to the state. Among the reasons forcing power cuts in peak winters and summer seasons in Kashmir and Jammu, respectively, against registered 3,101 MW load, the demand should not exceed 1,551 MW, but it is around 2,950 MW (un-restricted) that reflecting that there exists huge unregistered load. Use of unauthorised load creates system constraints by way of overloading the system at transmission, sub-transmission and at distribution levels, thereby causing further distress cuts in addition to the scheduled cuts. Schemes launched to overcome chronic problems at various levels, are Re-structured Accelerated Developmental Programme sanctioned at a cost of ₹ 1.51 billion under part-A and ₹ 16.65 billion under part-B. It is aimed at strengthening, upgrading and renovating sub-transmission and distribution network, adoption of IT application for meter reader, billing and energy accounting, in 30 identified towns of the state, including 17 of Kashmir division, 11 of Jammu division and 2 of Ladakh region. Energy mapping and energy auditing is subservient to 100 percent metering at all voltage levels. With meagre resources, Jammu and Kashmir Power Development Department has been able to bring down the T&D losses from 61.58 percent in 2011-12 to 52.87 percent in 2016-17. The launch of various centrally sponsored flagship schemes which are primarily reform centric, it is projected that the present high T&D losses shall be appreciably reduced post execution of these schemes.

Government's UDAY scheme has helped debt laden discoms of 24 states to reduce losses to ₹ 369 billion in 2016-17 from ₹515.9 billion in the previous fiscal. The UDAY was launched for the operational and financial turnaround of state-owned power discoms. The scheme aims to reduce interest burden, cost of power and power losses in distribution sector, besides improving operational efficiency of discoms. The participating states have achieved an improvement of one percent in Aggregate Technical & Commercial (AT&C or distribution) losses and ₹ 0.17/kWh Unit in the gap between Average Cost of Supply and Average Revenue Realised in 2016- 17.

Electricity tariffs across India are expected to rise by 62 to 93 paise ($0.0098-$0.0146) per kWh during the first year of upgrades to coal-fired power plants. The estimate of tariff increases of up to nearly 20 percent on average power fees comes amid rising levels of smog in the capital and other major cities, which has put pressure on the government and generators to tackle a growing public health crisis. Power tariffs are a politically sensitive issue in India, where more than three quarters of the electricity is generated by coal-fired power plants. The average power tariff in India is around ₹ 5/kWh. India, which is looking to facilitate loans to power producers through state-run financial institutions to fund one-time costs, aims to make all coal-fired power plants comply with emission-cutting norms by 2022. CEA (Central Electrical Authority) has prepared a phase-in plan for implementing new environmental norms to ensure minimum disruption while plants are shut down for retrofitting. Thermal power companies account for 80 percent of all industrial emissions of lung-damaging particulate matter, sulphur and nitrous oxides in India.

The government may consider increasing import duty on certain items related to power, capital goods and chemicals sectors in the forthcoming Budget with an aim to boost domestic manufacturing. The move would also help promote the government's ambitious 'Make in India' initiative. Imports of cheap power equipment have been affecting domestic manufacturers as well as created issues for independent power producers in view of poor quality and after sales service. The Indian Electrical and Electronics Manufacturers' Association in its pre-Budget recommendations have asked the government to remove concessional basic customs duty on imports of certain items in the power sector. It has also said that various finished products of electrical industry attracts a basic customs duty, ranging from 7.5 percent to 10 percent. However, the same finished products are imported at a concessional basic customs duty of 5 percent.

Power discoms in state have approached GERC seeking a hike in FPPPA base price or fuel surcharge. However, none have sought any increase in basic electricity tariffs for fiscal 2018-19. A power company is allowed to offset increase or decrease in fuel cost by way of FPPPA, also known as fuel surcharge. The four distribution companies — UGVCL, MGVCL, DGVCL and PGVCL — have proposed raising basic FPPPA by 6 paise per unit from ₹ 1.43/kWh to ₹ 1.49/kWh for the fiscal 2018-19. Gujarat Urja Vikas Nigam Ltd (GUVNL) affiliated discoms have filed petitions with the GERC for determination of power tariff for the next fiscal. The final quantum of FPPPA increase, however, will be fixed by GERC after hearing all the stakeholders. While private sector company Torrent Power Ltd supplies electricity to Ahmedabad, Gandhinagar and Surat, the state discoms cater to the rest of Gujarat.

Even as it gears up to woo investors in the state, mounting dues towards thermal power plants, including private ones, have come to stare in the face of UP government. UPPCL owes around ₹ 35 billion to some of the major power plants such as NTPC Ltd, NHPC, Lalitpur power plant and Rosa power plant. The situation could turn serious as Lalitpur Power Generation Company has issued a letter to UPPCL saying it does not have enough funds to buy coal and keep its units functioning. The company said that outstanding dues by December-end had crossed ₹12 billion. The company said the situation was "worsening" day by day. According to UP State Load Dispatch Centre, the 1,980 MW Lalitpur power plant has already shut one of its super-critical units of 660 MW citing "shortage of coal". The situation is equally bad for NTPC. Records show that UPPCL is yet to pay over ₹ 14 billion to the company which supplies 3,182 MW of power per day to the state.

A month ahead of the investors meet in UP, the state government offered yet another sop to industries by giving them the option to take power from the power discom of their choice. The power will be wheeled to the industrial units under the 'open access system' for which the state government will set up a help desk at the UP State Load Dispatch Centre (UPSLDC). The permission to take power from a source other than the existing distribution company will be granted by the UP power transmission corporation limited and the respective discom. Industries have been seeking power under the open access system but could not do so since the process for getting clearances was tedious. The open access policy, experts said, could prove to be a boon to the industries in UP which has a power crunch.

City residents should brace for higher tariff with electricity department submitting a proposal for enhancement in the existing rates. The department has submitted a tariff petition to JERC for enhancement in the tariff up to 20% for the next financial year in different slabs. In the domestic category, the electricity department has proposed a hike from ₹ 2.55 to ₹ 2.75 in the slab of 0-150 units. It has proposed increase from ₹ 4.80 to ₹ 5.80 in the slab of 151-400 units and ₹ 5 to ₹ 6 in slab above 400 units. In the commercial category, increase from ₹ 5 to ₹ 6.20 in the slab from 0-150, ₹ 5.25 to ₹ 6.45 in the slab of 151-400 and ₹ 5.45 to ₹ 6.75 in slab above 400 units has been proposed. The commission will take a decision on considering the proposed hike after interacting with the residents of the city. In the past five years, the commission has revised power tariff only twice - 2012-13 and 2015-16— and turned down the petition on three occasions on the ground that the department had failed to submit certain audited accounts. The electricity department caters to 2.15 lakh consumers of nine categories. The majority of power is consumed by domestic consumers followed by commercial category. Despite being repeatedly pulled by the JERC, the department has again failed to file the petition within stipulated time period. For the ongoing financial year, the department had filed tariff petition on January 19, while in 2016 the petition was filed on February 29.

Electricity consumers in Ahmedabad, Gandhinagar and Surat may have to cough up more as TPL has sought permission to increase power rates. The company claims that it needs higher rates to recover its past under-recoveries. The company has not actually demanded a hike in base tariffs — these are revised annually to cover future costs — it has instead proposed a rise in the form of regulatory charge from April 1, 2018. TPL has sought an increase of 25 paise per unit for Ahmedabad area which includes Gandhinagar. For Surat, the regulatory charge proposed to be levied is 20 paise. The private sector company has filed its petitions with GERC for determination of tariff for 2018-19. However, the final quantum of the hike to be passed on to the consumers will be decided by the state power regulatory body, which has sought suggestions and objections from all stakeholders by February 9. In its tariff petitions, Torren Power has stated that its past under recoveries, including carrying cost, works out to be ₹ 39 billion for Ahmedabad, and ₹ 67.79 billion for Surat supply area. The proposed increase, if approved, will translate into an estimated burden of ₹ 4.8 billion on the consumers. Torrent Power has stated in its petitions that it had last increased tariffs in the year 2015-16.

The power ministry is mulling using supercritical power plants to meet new emission norms instead of retrofitting the old polluting units, which could increase their tariff by up to 93 paise per unit. The government has estimated a capital expenditure of ₹ 8.8 million to ₹ 12.8 million/MW for retrofitting the old plant to meet new emission norms. The capital expenditure on retrofitting old plants to comply with new norms will be up to ₹ 12.8 million/MW.

Finally taking cognisance of large number of complaints of inflated power bills issued to farmers, MSEDCL has decided to hold bill correction camps at 11 kilovolt feeder level. MSEDCL said that farmers who have problems with their bills should go to MSEDCL offices with the last bill and receipt. MSEDCL circular issued in this regard states that if a farmer has participated in Mukhya Mantri Krishi Sanjivani Yojana by paying ₹ 3,000 or ₹ 5,000 and has applied for bill correction then his supply should not be disconnected till the deadline for paying the first instalment. However, if any farmer has not participated in the amnesty scheme then connection of such farmer should disconnected as per rules. The circular also states that if a farmer has paid the first instalment under the amnesty scheme then he would get an extension of three months for paying the remaining instalments.

Canadian asset manager Brookfield and the Kotak Mahindra group have jointly bid for 2,200 MW of power assets belonging to Jaypee Power Ventures, a unit of Jaiprakash Associates. The consortium submitted its bid to the committee of creditors and top executives gave a detailed presentation on operational and financial details for the mix of both thermal and hydel assets in north and east India, they said. A deal, if concluded, will close at an equity value of ₹ 35-40 billion, they said. The power assets are currently part of the SDR process intended to salvage the debt-laden company. Brookfield will own 90% of the assets, according to the proposal. Brookfield's local partner Kotak will hold the remaining 10%. Lenders to Jaiprakash Power Ventures have been looking to sell assets under the SDR scheme since March. Brookfield had held independent talks to purchase the 4,000 MW of assets. Lenders subsequently split these into two — 2,200 MW and 1,800 MW of assets — and sought bids separately for them.

The year 2017 draws to a close with improved performance of the power sector in November on key growth indicators including generation, electricity supply, coal availability and short-term prices even as capacity addition remained low. Power generation, excluding that from the renewable resources, increased 1.7 percent year-on-year to 95 billion units in November. The increase was driven by higher generation across all the sectors including thermal, hydro and nuclear. During the month, all India energy requirement rose 5.4 percent to 93 billion units as compared to the same month last year. India's power generation from the renewable sources improved by 4.4 percent year-on-year to 6.6 billion units in October 2017 on account of improved generation from the solar sector due to its higher installed capacity and marginal improvement in PLF. Wind power generation, however, continued to decline in October 2017 due to lower PLFs. The share of renewables in the total energy generation improved marginally to 6 percent in October 2017 from 5.9 percent in the same month last year.

Rest of the World

China’s power consumption rose 6.6 percent in 2017 from the year before to 6.31 trillion kWh, according to the NEA data. The nation’s industrial power consumption climbed 5.5 percent to 4.36 trillion kWh in 2017, the NEA said. China’s total installed generation capacity reached 1,777.03 GW by the end of 2017. The world’s No.2 economy consumed a total of 574.6 billion kWh of electricity in December, up 7.4 percent from the year before, according to the NEA data.

Norwegian utility company Statkraft said it has reduced its power trading operations in Turkey due to declining market liquidity and an unpredictable outlook. Statkraft now trades only electricity it generates itself at its two hydropower plants in Turkey. Statkraft sold an unfinished hydropower plant in Turkey last year to local group Limak, after fighting between Turkish security forces and Kurdish PKK militants in 2016 forced it to stop the plant’s construction. The Cakıt and Kargi hydropower plants have a combined capacity of 122 MW and are part of the feed-in regime in Turkey, not exposed to the Turkish forward market.

Nigeria’s electricity grid has been shut down by a fire on a gas pipeline, the power ministry said, as the country’s power infrastructure continues to struggle. Gas supply to several power stations was cut off because of the fire on the Escravos Lagos Pipeline System near Okada in the southern state of Edo, the ministry said. The outage went unnoticed in parts of Nigeria, where blackouts are common and many businesses and households are forced to rely on their own power generators or, for the less wealthy, not have any electricity. The country’s dilapidated power grid is often blamed for hobbling growth in Africa’s largest economy. Most of Nigeria’s power generation is from thermal power stations that use gas, according to the power ministry. In the city of Bauchi in northeast Nigeria, the grid outage went unnoticed because people have already had weeks of power cuts.

Morupule B Power Station, a coal-fired power station built by the China National Electric Engineering Corp, has been credited to spurring electricity production in Botswana, Statistics Botswana said. Statistics Botswana said the volume of electricity generated in the third quarter of 2017 stood at 893,831 MWh, an increase of 32.4 percent from 675,047 MWh in the second quarter. Morupule B Power Station, located some 270 km north of the capital Gaborone, accounts for 90 percent of the country's domestic power generation. The generation of electricity in Botswana started in 1985 with a coal-fired thermal power station at Morupule operating at a capacity of 132 MWh. Prior to that, most of Botswana's electricity was imported from South Africa's power utility, Eskom. In 2008, South Africa's electricity demand started to exceed its supply, resulting in the South African government restricting power exports. The volume of imported electricity decreased by 62.6 percent from 333,355 MWh during the third quarter of 2016 to 124,612 MWh during 2017 third quarter.

Israel is set to open its power generation sector to more competition after workers at IEC agreed a preliminary deal that also aims to help the state-owned utility cut its huge debts. A stand-off between the government, IEC and its workers has long been viewed as a constraint on Israel’s economy. The utility has said it never received enough money, with prices capped by the government, while IEC’s powerful workers’ union has blocked previous attempts to introduce competition. That stands to change, with the union giving its preliminary consent to a reform. A final agreement will be negotiated over the next 45 days. Under the outline agreement, IEC will remain a monopoly in distribution, but supply will be gradually opened up to competition. Areas such as system management and planning will be taken away and sold to a different government-owned company. The government had managed to open the power production market on a small scale in recent years and about a quarter already comes from private operators.

NATIONAL: OIL

Petrol, diesel prices largely aligned to global rates: IOC

January 30, 2018. Petrol and diesel prices in India are to a "large extent" aligned to international rates, Indian Oil Corp (IOC) Chairman Sanjiv Singh said, responding to the charges of government meddling in fixing of fuel prices. The prices are revised daily based on 15-day rolling average rate of their international benchmark, he said. Prices in international markets have been fluctuating and are being reflected in domestic rates, he said. The prices at petrol pumps of state-owned fuel retailers like IOC were cut by 1-3 paisa every day in the first fortnight of December. They started moving up immediately after polling for assembly elections in Gujarat concluded, leading to speculation that government may have asked oil companies to hold on to the prices.

Source: Business Standard

Saudi Aramco planning oil refinery in India as part of expansion plans

January 30, 2018. Saudi Aramco, the state oil company of Saudi Arabia, is considering entering India as part of its Asian expansion. The Saudi government has said it plans to sell about 5 percent of Aramco, hoping to raise some $100 billion or more in what would likely be the world’s biggest initial public offer.

Source: Reuters

As petrol, diesel prices rise, CEA calls to bring them under GST

January 29, 2018. Amid spiralling petrol and diesel prices, Chief Economic Advisor (CEA) Arvind Subramanian called for petroleum products to be brought under the ambit of the Goods and Services Tax (GST). He also made a case for one rate under the GST for all goods and services down the line. Petrol and diesel prices rose to a three-year high across metro cities. Petrol prices in the national capital were at Rs 72.49 per litre -- the highest in over three years. Petrol prices in Kolkata, Mumbai and Chennai were at Rs 75.19, Rs 80.39 and Rs 75.18 per litre respectively -- all three-year highs. Similarly, diesel prices have also been hitting record levels.

January 25, 2018. As the crude oil prices rise, the government may ask upstream firms like Oil and Natural Gas Corp ((ONGC) to bear a part of the kerosene and LPG (liquefied petroleum gas) subsidies, India Ratings and Research said. Producers Oil and Natural Gas Corp (ONGC) and Oil India Ltd as well as gas utility GAIL were in past asked to bear between one-third to half of the under-recovery fuel retailers incurred on selling LPG and kerosene below market rate. This subsidy sharing scheme ended last fiscal. India Ratings said given the sharp increase in international crude price, oil marketing companies may be required to bear a part of the under-recoveries. This would be on the lines of past when the government capped the subsidy burden it was willing to share per kilogram and per litre on LPG and kerosene, respectively. Any under-recovery over and above the level up to which the government can bear is to be borne by upstream and oil marketing companies, it said. India Ratings said ONGC's acquisition of Hindustan Petroleum Corp Ltd (HPCL) will be credit neutral for ratings of HPCL. ONGC, which is 68.94 percent owned by the government, will acquire the government's 51.11 percent stake in HPCL for Rs 36,915 crore. Despite the change in ownership, HPCL will continue to operate as a separate entity with a strong brand. Its strategic importance to the government is likely to remain intact, given the company's role as the State's extended arm for fuel policy implementation. It could use one or more of the three sources for funding -- fresh debt, cash and cash equivalents, and monetisation of its stake in entities such as GAIL (India) Ltd, Indian Oil Corp (IOC) and Petronet LNG Ltd. The combined value of its stake in the three entities is about Rs 34,400 crore. For HPCL, the acquisition may result in some synergies in crude oil procurement with Mangalore Refinery and Petrochemicals Ltd, which is 71.63 percent owned by ONGC. HPCL, along with HPCL-Mittal Energy Ltd and MRPL, represented 15.3 percent of India's total crude import volume of 249 million tonne. Also, HPCL may be able to capitalise on ONGC's petrochemical expertise while expanding its footprint in the segment. The combined entity would be the third-largest refiner in India, with a refining capacity of 43.1 million tones, behind IOC's 80.8 million tonnes and Reliance Industries Ltd's 62 million tonnes. India Ratings said HPCL may have to resort to additional borrowings in case it was to acquire ONGC's stake in MRPL for cash. ONGC's stake in MRPL is worth Rs 16,400 crore. ONGC-HPCL deal is unlikely to alter government subsidies for kerosene and LPG.

Source: Business Standard

BPCL’s Kochi refinery becomes the largest public sector refining unit in India

January 25, 2018. Kochi crude oil refinery in Kerala, operated by fuel retailer Bharat Petroleum Corp Ltd (BPCL), has completed its expansion project to become the largest public sector refinery in the country, surpassing the capacity of Paradip and Panipat refineries operated by the largest retailer Indian Oil Corp (IOC). BPCL completed the Rs 16,500 crore Integrated Refinery Expansion Project (IREP) at Kochi in October last year, ramping up the capacity of the unit to 15.5 million tonnes (mt) from the earlier 12.4 mt. That compares with 15 mt capacity each of IOC’s Paradip refinery in Odisha and Panipat refinery in Haryana. The Kochi oil refinery processed 1.2 mt crude in December 2017 as compared to 1 mt processed in the corresponding month a year ago, data from the Petroleum Planning and Analysis Cell (PPAC), an arm of the oil ministry, shows. India had a total installed crude oil refining capacity of 247.6 mt at the end of December 2017 including 69.2 mt operated by IOC, 36.5 mt operated by BPCL and 27.1 mt operated by the third state-owned retailer Hindustan Petroleum Corp Ltd (HPCL).

Source: The Economic Times

Responsible pricing key to global oil industry growth: Oil Minister

January 25, 2018. Oil Minister Dharmendra Pradhan said responsible pricing is key for the growth of the global oil industry as consumers in countries like India are price sensitive. He also asserted that producing countries must ensure there remains a price balance. Speaking at a session on 'The New Energy Equation' at the World Economic Forum (WEF), he said India is very much focused on adding renewable energy capability but it is a consuming country and would be dependent on oil for some time.

Source: The Economic Times

NATIONAL: GAS

RIL’s KG-D6 gas fields Q3 output drops

January 28, 2018. Reliance Industries Ltd (RIL)’s eastern offshore KG-D6 gas fields have seen production plummet to the lowest level of 4.9 million metric standard cubic meter per day (mmscmd) in the third quarter (Q3) of the ongoing fiscal. Natural gas production from Dhirubhai-1 and 3 (D1&D3) gas fields as well as MA field totalled 4.9 mmscmd, the company said. The output came from seven wells on D1&D3 fields and three wells on MA oil and gas field, the company said, reasoning the fall to natural decline and ingress of water and sand in the wells.

Source: The Hindu

ONGC’s gas production up 8 percent in 9 months of current fiscal

January 27, 2018. ONGC (Oil and Natural Gas Corp)'s gas production rose 7.9% and crude output went up 1.5% in the first nine months of the current fiscal against the previous corresponding period, the company said. The ONGC board had approved projects worth over Rs 78,000 crore in the last three years. These projects will lead to additional oil and gas output of over 180 million tonne oil equivalent. The acquisition of government's 51.11% stake in HPCL (Hindustan Petroleum Corp Ltd) will make ONGC India's third-largest refiner and the first fully vertically integrated energy company, straddling the entire hydrocarbon value chain. The acquisition of HPCL will bolster the kitty of MRPL (Mangalore Refinery and Petrochemicals Ltd), ONGC's refining subsidiary that processed a record 16.5 million tonnes of crude.

Source: The Economic Times

RIL, BP get nod to acquire Niko’s 10 percent stake in gas block

January 27, 2018. The government has approved Reliance Industries Ltd (RIL) and British energy giant BP plc acquiring their cash-strapped partner Niko Resources' 10% stake in gas discovery block NEC-25 in the Bay of Bengal. Niko had in mid-2015 chosen to withdraw from the NEC-25 block and relinquish its interest to the remaining stakeholders. RIL is the operator of the block with 60% interest while BP of the UK has the remaining 30% stake. The 10% stake has been split between RIL and BP in proportion to their equity stake. Gas discoveries in North-East Coast block NEC-0SN-97/1 (NEC-25) hold recoverable reserves of 1.032 trillion cubic feet. The Canadian company has been facing cash problems and had even put up for sale its interest in NEC-25 as well as 10% stake in RIL's Krishna Godavari basin oil and gas producing block KGDWN-98/3 or KG-D6. It could not find a buyer though. Last year, RIL had stated that the block oversight panel, called Management Committee (MC), has reviewed the declaration of commerciality (DoC) of gas find D-32 in the block. RIL in March 2013 had submitted a $3.5 billion Integrated Field Development Plan for producing 10 million standard cubic metres per day of gas from the discoveries D- 32, D-40, D-9 and D-10 in NEC-25 by mid-2019.

Source: The Economic Times

PNGRB revising city gas licensing rules: Chairman

January 26, 2018. The downstream regulator is reworking city gas licensing rules, readying to launch 100 new city gas distribution licences, and cut myriad litigations it’s been caught in with gas companies, to rebuild itself into a more effective and credible watchdog that can help country achieve its target of raising the share of natural gas in the energy mix from 6% to 15% by 2030. PNGRB (Petroleum and Natural Gas Regulatory Board) has often been criticised in the past for less than optimal rules needed to support the development of the gas sector in the country. PNGRB will announce the names of 100 more districts for which it intends to award licences, Dinesh Sarraf, who has recently taken over as the Chairman of PNGRB, said. The choice of districts will be such that more highways have gas coverage, making inter-city commute for CNG vehicles possible, he added. So far only 91city gas licences have been awarded in the country, including 14 delivered in the last one month. Before the auction for 100 new licences are launched by March, PNGRB plans to rework bidding norms, hoping to plug the loopholes in the existing rules often blamed for poor growth of city gas. As per the draft guidelines, open to stakeholder consultation, winner will be chosen on the basis of the number of consumers connection and CNG (compressed natural gas) stations, and the length of gas pipeline bidders promise to achieve in a given time frame, Sarraf said.

Source: The Economic Times

Essar Oilfields bags Rs 320 mn well drilling contract from ONGC

January 24, 2018. Essar Oilfields Services India Ltd (EOSIL) said it has been awarded a contract worth Rs 32 crore by Oil and Natural Gas Corp (ONGC) to drill 30 wells at the latters coal bed methane block in Bokaro in Jharkhand for one year. Work is likely to commence in the next few weeks, EOSIL said. The oil services provider has three of its land rigs currently in operation, the company said.

Source: Business Standard

NATIONAL: COAL

Essar Power to surrender Tokisud coal mine, seek Rs 4.9 bn

January 28, 2018. Faced with delays in key approvals and sudden change in tariff terms, Essar Power has decided to surrender the Tokisud North coal block in Jharkhand in which it has already invested Rs 490 crore. The move will cripple the company's 1,200 MW Mahan plant in Madhya Pradesh (MP). The Ruias-run company has made significant progress in developing the coal block, which has extractable reserves of 52 million tonne, and won through a competitive bidding process in February 2015 offering Rs 1,100 a tonne, the highest in the industry. Surrendering the coal block will hit its 1,200 MW, Rs 8,000 crore Mahan Power Plant, which had been shut between September 2014 and May 2016 after the Supreme Court had cancelled all the 204 coal blocks allotted by the previous Manmohan Singh government citing corruption. The Mahan plant resumed operations in May 2016 after Essar Power procured coal through government conducted e-auctions and the company hopes to rework the power purchase agreement with the MP distribution company (discom) accordingly. The coal ministry had issued a termination notice to the Tokisud North coal mines and asked them to forfeit Rs 261 crore bank guarantee for non-payment of upfront amount for the block.

Source: Business Standard

CIL needs tight quality control to profit from new pricing policy

January 26, 2018. Coal India Ltd (CIL)’s decision to move to the global standard of charging customers based on the actual consumption of the gross calorific value (GCV) of coal may work in the company’s favour only if it can control quality and assure supplies in the higher bracket of a said coal grade. The current pricing mechanism, according to CIL, is based on considering the mid-point of the GCV range of a particular grade. Thus, if the miner supplies coal that is higher than the mid-point GCV, it loses revenue. Under the new mechanism, this would change. GCV is the amount of heat released by the complete combustion of a unit of natural gas or coal. To elucidate this fact, the official pointed out that G11 grade of coal has a GCV range of 4,000-4,300 kcal. The price of G11 has been fixed at Rs 955 per tonne considering the mid-point GCV to be 4,150 kcal. Under the new mechanism, which will be effective from the 2018-19 financial year, the consumer will be charged based on the actual GCV consumption, which eliminates the scope of losing revenue. Coal consumers have been complaining a lot about the quality of Indian coal alleging not only about grade slippages but pointing that the coal supplied is towards the lower end of the contracted GCV range. The Coal Consumers Association (CCA) said that although India has the world's fifth-largest coal reserves at 308.80 billion tonnes, the coal seams in the country are laden with stone bands and layers. Thus, the deposits are not as pure or refined as is the case with Australia, South Africa or other producers. CIL said that the revision in the billing policy was imminent as it brings the miner at par with global practices and would benefit the consumers. However, CIL will continue to have the current 17 coal grades in place. Nevertheless, analysts caution CIL of revenue shortfall in case the exact contracted GCV is not supplied.

Source: Business Standard

CBI begins probe into Rs 4.8 bn coal imports ‘irregularities’

January 24, 2018. The Central Bureau of Investigation (CBI) has launched an investigation into alleged irregularities in the invoicing of inferior quality coal imported from Indonesia which was passed on to state run power generation companies, NTPC Ltd and Aravali Power Company as 'superior quality', causing a loss of Rs 487 crore. The over-invoicing of imported coal imported between 2011-12 and 2014-15 was done in connivance with officials of NTPC, MMTC and also APCPL, a joint venture of Delhi and Haryana government with NTPC, a probe by directorate of revenue and intelligence in the matter had revealed. NTPC, MMTC and APCPL operate coal-based thermal power plants for which they import coal through global tenders. MMTC and CEPL emerged successful bidders for the supply of coal.

Source: The Economic Times

NATIONAL: POWER

Adani Power seeks nod for setting up power SEZ in Jharkhand

January 30, 2018. Adani Power has sought approval from the commerce ministry for setting up of a special economic zone (SEZ) for the power sector in Jharkhand, entailing investment of Rs 15,002 crore. The application will be considered by the Board of Approval, the highest decision making body of the SEZs, in its meeting on February 5. The developer of the zone - Adani Power (Jharkhand) has sought in-principle approval for setting up of a sector specific SEZ for power at Godda district in Jharkhand over an area of 425 hectares, an official said. The developer has informed the ministry that it is in the process of acquiring the land through the state government. The project, according to the company's application, would generate 199 direct employment and 15,000 indirect jobs. Adani Power (Jharkhand) is a step-down subsidiary of Gautam Adani Group firm Adani Power, which is mainly into power generation.

Source: Business Standard

New power projects being set up at a cost of Rs 538.9 bn: Tamil Nadu CM

January 30, 2018. The Tamil Nadu government has taken steps for setting up new power projects with a total generation capacity of 9,300 MW, at a cost of Rs 53,890 crore, Chief Minister (CM) K Palaniswami said. After laying the foundation stone of Stage-I of Udangudi Super Critical Thermal Power Project, he said as the demand for electricity is expected to increase in the future, "constructive steps" are being taken by the government to increase generation. He said the Udangudi project was expected to come into operation by 2020-21. Palaniswami said that Tamil Nadu Transmission Corp Ltd has become the first agency in the country to set up high-voltage power transmission facility during the financial year 2016-17. He said the installed power capacity of the state had increased 16,873 MW in 2010 to 29,492 MW now. Due to various initiatives, Tamil Nadu has become a power surplus state, he said.

Source: Business Standard

Reliance Power Q3 net profit slightly up at Rs 2.8 bn

January 30, 2018. Reliance Power declared a marginal rise in net profit at Rs 280 crore for the third quarter (Q3) ending December, over the Rs 276 crore posted on this account in the same quarter of the last fiscal. For the first nine months of the financial year (April-December), the company, however, reported a fall in net profit at Rs 784 crore, as compared to the Rs 888 crore earned in the same period of 2016-17. The company's operating revenues during the quarter under consideration at Rs 2,495 crore fell by 11 percent, as compared to the Rs 2,778 crore earned during the same period a year ago. The company said its 3,960 MW Sasan Ultra Mega Power Project (UMPP) in Madhya Pradesh generated 8,274 million units, operating at a plant load factor (PLF) of 95 percent. While the company's 1,200 MW Rosa power plant in Uttar Pradesh generated 1,938 million units, operating at a PLF of 73 percent, the Butibori power plant in Maharashtra generated 1,061 million units, operating at the PLF of 80 percent.

Source: Business Standard

Punjab government yet to pay Rs 77 bn subsidy bill to PSPCL

January 29, 2018. Even as the Punjab government is planning to introduce a direct-bank transfer (DBT) scheme for power subsidies on agricultural connections, the pending power subsidy bill continues to accumulate, as the state government has not paid monthly installments to Punjab State Power Corp Ltd (PSPCL). As per the revised tariff order approved by the Punjab State Electricity Regulation Commission (PSERC), the subsidy bill for this fiscal stood at Rs 10,917.40 crore. PSPCL said the state government has to date released Rs 3,221.49 crore and Rs 7695.91 crore of subsidies to be paid to PSPCL are still pending. The remaining amount is to be cleared in the next two months, else it will lead to a massive carry forward of the pending subsidy bill for the next fiscal. Of the Rs 10,917 crore, Rs 5664.74 crore is for free power to agriculture connections, Rs 1121.80 crore is meant for domestic supply to schedule caste families, Rs 87.24 for families below the poverty line (BPL), and Rs 707.98 crore for backward classes. Freedom fighters' families will get subsidised power of Rs 83 lakh and the new industry set up under the Progressive Punjab Scheme will get a subsidy worth Rs 113.31 crore. There is also a carry forward of Rs 2,909.42 crore from previous years. Meanwhile, a petition seeking discontinuation of the power subsidies in case of default in the release of advance payment, filed by a retired chief engineer of the power board, is already pending before Punjab State Power Corp Ltd (PSERC). The petition seeks directions to the state government to clear pending subsidy amount and ensure the release of the same on monthly basis or face discontinuation of the power subsidies as per the provisions of Sections 62, 65, 86 of Electricity Act 2003.

Source: The Economic Times

Chandigarh plans to reduce power breakdowns with new system

January 28, 2018. For streamlining of functioning of electricity department, the UT administration is all set to implement supervisory control and data acquisition (SCADA) system. The system will help monitor performance of transformers, bringing down power breakdowns. The SCADA system is being implemented under the National Smart Grid Mission (NSGM), which has been approved by the Union power ministry. UT superintending engineer M P Singh said the SCADA will help the department in streamlining the power distribution and ensure uninterrupted power supply to consumers. The project will also help the department in bringing down transmission and distribution losses from existing 15.37% to 8%. It will also help the department overcoming the problem of theft.

Source: The Economic Times

Power bill payments by customers rise after ‘reminders’ in Uttar Pradesh

January 28, 2018. The Paschimanchal Vidyut Vitaran Nigam Ltd (PVVNL) had launched a 'Tagada' scheme in December last year to increase the monthly revenue collection from power bills. Since then, 8% more consumers have deposited their power bills, thus increasing the revenue of the department. On an average 75% of urban customers pay their bill on time and the scheme has been started to increase this percentage. Under the scheme, staff from each substation call up customers who have extended the deadline of depositing their bill and remind them the same. This is a unique initiative launched in Ghaziabad zone that comprises of Ghaziabad, Bulandshahr and Hapur districts.

Source: The Economic Times

Power utility to scan 2.2 lakh meters for tampering in Maharashtra

January 25, 2018. The low usage of power through over 2.2 lakh electricity meters in Aurangabad zone has prompted the power utility to launch a scan. As many as 2,27,356 electricity meters from Aurangabad zone, which account of nearly 30% of total consumers, are on the radar of the Maharashtra State Electricity Distribution Corp Ltd (MSEDCL) authorities for suspected tampering. MSEDCL said that consumption of at least 50 units is expected from consumers, even after considering minimum usage. The Aurangabad circle has 1,79,448 consumers having suspected power consumption, including 1,48,010 consumers from rural areas and 31,438 from urban areas. Aurangabad zone of MSEDCL also includes Jalna district, which has another 47,908 suspected consumers, the official data shows. The proposed campaign against suspected consumers will witness testing of electricity meters, assessment of power consumption, recovery of dues towards excess usage if established and termination of power supply besides punitive action as per laws. MSEDCL authorities said multiple modus operandi are involved for tampering of electricity meters, including use of remote control like devices. As per the section 126 of the Electricity Act, 2003, in case of detection of unauthorized use of energy, tariff equal to twice the applicable rate for the relevant category is recovered. Also, the section 135 of the Act stipulates for initiating police action among other stern actions. Consumers representative on Maharashtra Electricity Regulatory Commission (MERC) Hemant Kapadia said it was duty of the MSEDCL to carry our periodic checks of electricity meters. It may be noted that the state power utility had carried out special drive to detect power theft by commercial establishments in Marathwada in November last year, exposing as many as 269 cases of drawing of electricity in an illegal manner.

Source: The Economic Times

Large power consumers may not have to bear cross-subsidy charges: Power Minister

January 25, 2018. The government is planning to remove cross-subsidy charges levied on large power consumers, power minister R K Singh said, offering a major relief to industrial and commercial establishments. He said the government is planning to amend the national tariff policy, which provides for a maximum of 20% cross subsidy charges. The power ministry will consult the state governments on the removal of cross-subsidy charges, he said. He said the government plans to introduce a licence renewal mechanism for electricity distribution companies to keep a check on the power supply capabilities of the utilities. The proposal is likely to be part of Electricity Act amendment bill likely to be tabled in Parliament in the budget session, he said. As per the proposal, the distribution utilities will have to apply for renewal of their licences every five years. The amendment bill is likely to propose raising multifold the penalties on distribution companies for load-shedding and propose a direct benefit subsidy transfer mechanism by state governments to power consumers. At present, the Act fixes universal service obligation on distribution licensees to provide electricity to all applicants and the penalty for non-compliance can extend up to Rs 1,000 per day of default. The road map for one of the most awaited reforms in the power sector by enabling electricity consumers to choose their supplier is also likely to be provided in the bill.

January 24, 2018. Power Finance Corp (PFC), the state-owned power sector financing body, announced it has sanctioned financial assistance in the form of loan to the tune of Rs 1,350.69 crore to Bihar Grid Company Ltd (BGCL). BGCL is a joint venture between central transmission utility Powergrid Corp and Bihar State Power (Holding) company and has the mandate to develop the intra-state transmission network of Bihar. The financial assistance will be used to construct 16 transmission lines of 400 kilovolt (kV), 220 kV and 132 kV capacity apart from four associated substations and seven Line Bay Extension projects in Bihar. The estimated cost of the entire project is Rs 1,688.36 crore which is proposed to be funded with 80 percent debt and 20 percent equity. The project is expected to be commissioned by July 2021.

Source: The Economic Times

NATIONAL: NON-FOSSIL FUELS/ CLIMATE CHANGE TRENDS

Uttar Pradesh to set up 10.7 GW solar plants in 5 yrs

January 30, 2018. The Uttar Pradesh government will set up around 6,000 solar power plants to meet its clean energy target of 10,700 MW in the next five years, Additional Energy Sources Minister Brijesh Pathak said. Uttar Pradesh has a solar energy potential of 22,300MW, which the state intends to harness to meet the solar power generation target of 10,700 MW fixed by Union Ministry of New and Renewable Energy (MNRE), he said. He claimed that solar panels have been designed to provide uninterrupted power for 25 years and appealed to people to purchase such panels for enjoying uninterrupted power supply in their houses.

Source: The Economic Times

Coca Cola to run factories on solar power in Andhra Pradesh, Telangana

January 30, 2018. FMCG major Hindustan Coca-Cola Beverages (HCCB) Pvt Ltd said it will be using solar power as the primary source of energy for manufacturing operations at all its factories in Andhra Pradesh and Telangana. HCCB, which owns and operates three factories in the two states, has signed agreements with Vibrant Energy, a Hyderabad-based green energy solutions company, to procure 2.7 crore units of solar power for the three factories. HCCB will procure 1.2 crore units from Vibrant Energy for its factory in Ameenpur (Telangana) and 1.5 crore units for its factories in Vijaywada and Srikalahasti (Andhra Pradesh).

Source: The Economic Times

Azure Power bags 11.35 MW contract for solar rooftop projects in six states

January 30, 2018. Azure Power, an independent solar power producer, announced it has bagged a contract from Navodaya Vidyalaya Samiti for setting up solar rooftop projects of 11.35 MW capacity in 152 schools across six states. The company said it will sign the power purchase agreement with the Samiti, an autonomous body under the Ministry of Human Resource Development (HRD), and qualifies for a capital incentive expected to result in a weighted average levelized tariff of Rs 4.97 per unit. The projects will be located in Uttar Pradesh, Madhya Pradesh, Rajasthan, Karnataka, Chhattisgarh and Kerala. Azure Power has a total portfolio of over 1,600 MW capacity projects across India.

Source: The Economic Times

Enercon readies biggest wind turbines for India

January 28, 2018. For its second innings in India, German wind turbine manufacturer Enercon plans to bring in machines that will be the biggest to be sold in the country. The firm’s Chief Risk Officer, Wolfgang Juilfs, said that the company has started offering machines of rated capacity of 3.5 MW. It is developing suppliers for the machines, which will come in two versions — one with blades that will sweep a circle of 138 metres and the other 126 metres. The height of the tower on top of which the turbines would be placed will depend upon the site, but it could be as high as 131 metres, in which case the tower will be a hybrid of a concrete structure and tubular steel, Juilfs said. He said wind energy companies could participate in competitive bids now if the projects need to be commissioned by 2019-20end. Enercon will be ready with its machines by then. These, then, will be the biggest wind turbines to be sold in India. The Indian market is dominated by machines of a nominal capacity of around 2 MW and 120 metre high. The only other company to have a 3 MW machine is another German company, Nordex. Juilfs said that Enercon expected wind energy tariffs in India to go up.

Source: The Hindu Business Line

Solar industry seeks clarity, relief in safeguard duty in Budget 2018

January 28, 2018. Concerned over future of the sunrise industry which is facing threat due to the proposed imposition of 70 percent safeguard duty on import of solar power equipment, sector experts are expecting some breather from the Union Budget 2018-19. Industry experts believe that the imposition will not only increase the tariff by almost Rs 1 but it will put the projects under execution in deep trouble resulting in making them unviable, turning them into non-performing assets. As per industry estimates, nearly 3000-4000 MW of solar projects worth over Rs 15,000 crore are at high risk, especially when solar cells and modules that account for 60 percent of the total project cost are either in transit or have been tied-up for. Solar solutions provider Eastman Auto and Power Managing Director Shekhar Singal said the imports from countries like China, which is around 80 percent, needs to be curbed, but it is important to see the projects are not affected due to the unreasonably high duty.

Source: The Economic Times

Suzlon likely to set up power plant in Telangana

January 27, 2018. In a big boost to the power sector in the state, renewable energy giant Suzlon Group has expressed interest in setting up a power plant, the Telangana government said. State IT and Industries Minister K T Rama Rao met Suzlon Group chairman Tulsi Tanti on the sidelines of the World Economic Forum (WEF) at Davos, where Tanti expressed interest in setting up a power plant in Telangana. Suzlon Group in January 2016 announced its foray into the solar sector by winning 210 MW solar power projects in Telangana.

Source: The Times of India

Solar panels to be installed at railway stations in Vadodara division

January 27, 2018. To avoid and minimise the usage of conventional source of power, the Vadodara railway division of Western Railways has started the process of installing solar panels at railway stations falling under its jurisdiction. As part of the initiative, solar panels will be installed at Vadodara, Anand, Nadiad, Bharuch, Godhra and Ankleshwar railway station among others that fall under the railway division. The railway division will install such solar panels not only at the stations but also at service buildings, sheds and other rooftop areas. Vadodara railway division has been allotted a total of 1.05 megawatt peak (MWp) capacity solar panels that will be installed across the division.

Source: The Times of India

Government estimates 9-11 percent IRR for renewable projects

January 26, 2018. The Ministry of New and Renewable Energy (MNRE) has proposed internal rate of return (IRR) of major renewable energy projects to be in the range of 9-11%. The assumptions are based on zero government incentives, reflecting return rates in a no-subsidy scenario. While IRRs for solar and wind projects are estimated to be between 9 and 11%, small hydro plants are seen to fetch IRRs between 9 and 10%. The estimates are based on the assumption of 10.5% cost of debt and 34.61% income tax rate for all types of renewable projects. The capacity utilisation factor for wind, utility-scale solar and small hydro projects were set at 25%, 20% and 40%, respectively.

Source: The Financial Express

Chennai Metro trains tap own energy, go slow on fossil fuel use

January 26, 2018. According to metro rail, a four-car rake running nearly 400 km a day can generate about 1,900 kilowatt hour (kWh) of power (the amount of energy converted from work at an average rate of 1,000W per hour). The train consumes 6,300 kWh to run that distance. The trains use regenerative braking system technology to generate power every time brakes are applied. In a regenerative braking system, three-phase traction motors in trains act as generators whenever brakes are applied, turning the kinetic energy of the train into electrical energy that goes into the overhead lines. Metro rail now operates 13 trains on 29 km of operational line on Koyambedu to Alandur, Little Mount to Airport and Nehru Park to Thirumangalam stretches, apart from running a direct service from Nehru Park to Airport every 30 minutes. By meeting 30% of power needs on its own, metro trains are cutting down carbon emissions as it reduces dependency on power supplied by Tamil Nadu Electricity Board (TNEB), which relies on fossil fuels. Delhi Metro, operating for 15 years, was reported to have prevented emission of more than 90,000 tonnes of CO2 between 2004 and 2007 by using the regenerative braking systems and by becoming the first railway project in the world to be registered for carbon credits by the United Nations. Metro rail also indirectly contributes to reducing carbon footprint as it takes four-wheelers and two-wheelers off the road. Experts estimate that every passenger using the metro instead of other mode of transport contributes to about 100 gm of CO2 reduction for every 10 km trip.

Source: The Times of India

Renewable electricity production to mitigate climate damage cost of coal based power

January 26, 2018. Renewable electricity production, Renewable electricity, renewable power, climate damage, coal based power The Ministry of New and Renewable Energy (MNRE) said that increase in renewable-based electricity production would have several benefits including mitigating the cost of environmental damage of coal-based power. MNRE said that increase in renewable-based electricity production would have several benefits including mitigating the cost of environmental damage of coal-based power. Currently, environment damage due to use of fossil fuel to generate power is estimated at Rs 0.81/unit. Pitching for augmentation of renewable energy output, the ministry noted that the social cost of carbon would rise from Rs 0.14/unit in 2015 to Rs 0.30/unit in 2040.

Source: The Financial Express

Rajasthan deploys ABB technology for clean solar power generation

January 25, 2018. Rajasthan has deployed ABB technologies, the power and automation technology group, for 40 percent of clean solar power generated in the state, the technology service provider company said. The company said that the state is set to take a quantum leap in solar energy with projections to double the capacity in the next two years to 5,000 MW. The company's offerings include a range of solutions from solar inverters, turnkey substations and a variety of electrical equipment with comprehensive offering and local support, which help power huge solar parks in the state.

Source: The Economic Times

India ranks 177 out of 180 in Environmental Performance Index

January 24, 2018. India is among the bottom five countries on the Environmental Performance Index 2018, plummeting 36 points from 141 in 2016, according to a biennial report by Yale and Columbia Universities along with the World Economic Forum. While India is at the bottom of the list in the environmental health category, it ranks 178 out of 180 as far as air quality is concerned. Its overall low ranking — 177 among 180 countries — was linked to poor performance in the environment health policy and deaths due to air pollution categories. It said deaths attributed to ultra-fine PM (particulate matter) 2.5 pollutants have risen over the past decade and are estimated at 1,640,113 annually in India.

Source: The Hindu

Don't allow new power plants if they violate MoEF norms: NGT

January 24, 2018. The National Green Tribunal (NGT) has directed the Ministry of Environment and Forests (MoEF) not to grant clearance to any new thermal power plant till they comply with the standards set by it, after a plea alleged that many of them were flouting norms and causing pollution. A bench headed by acting Chairperson Justice U D Salvi said the failure of the thermal power plants to adopt techniques to reduce emissions would affect the environmental scenario. The Environment Ministry in December 2015 had issued a notification revising the standards for coal-based thermal power plants across the country, which aimed to reduce emissions like sulphur dioxide, nitrogen dioxide and particulate matter, besides water consumption. These power plants were given a deadline of December 2017 to install appropriate mechanisms and technologies to cut emissions.

Source: The Times of India

INTERNATIONAL: OIL

Diamond Pipeline disrupts oil flows around US

January 30, 2018. The Diamond Pipeline has scrambled crude oil flows around the United States (US) Gulf Coast and Midwest since it opened in December, cutting supply at the Cushing hub and hammering Louisiana oil prices. The line from Cushing, Oklahoma to Memphis, Tennessee, a joint venture between Plains All American Pipeline LP and Valero Energy Corp, has dented volumes on the Capline system - the nation’s largest crude pipeline that runs from the Gulf to key refineries in the Midwest. The line can carry as much as 1.2 million barrels of oil daily from St. James, Louisiana, to Patoka, Illinois but has seen volumes further eroded by Diamond, which has capacity of up to 200,000 barrels, traders said. Flows on the Capline trunk line have fallen from about 310,000 barrels per day (bpd) in July to about 219,000 bpd in the week ended January 19, while Diamond was just above 150,000 bpd in that week, according to data from energy intelligence and monitoring firm Genscape. The 440-mile long Diamond line feeds Valero’s Memphis, Tennessee refinery, which has a capacity of about 190,000 bpd. Valero has historically moved large volumes from North Dakota’s Bakken shale region by rail to Louisiana and then shipped it up Capline, a long and expensive route, traders said.

Source: Reuters

Iraq to build oil refinery in Fao with Chinese firms, plans three others

January 29, 2018. Iraq plans to build an oil refinery at the port of Fao on the Gulf with two Chinese companies, and is seeking investors to build three more, the oil ministry said. The refinery in Fao will have a 300,000 barrel per day (bpd) capacity and include a petrochemical plant. Two other refineries, each with a 150,000 bpd capacity, are planned in Nasiriya, southern Iraq, and in the western Anbar province. A third, with a 100,000 bpd capacity, is planned in Qayara, near Mosul, the northern Iraqi city, which was taken back from Islamic State militants last year.

Source: Reuters

Oil production at Iran's West Karoun nearly doubled in the past year: Oil Minister

January 28, 2018. Oil production from the West Karoun oilfields in southwest Iran nearly doubled in the past year, Oil Minister Bijan Zanganeh said. Oil production for the West Karoun oilfields for the Iranian month of Dey, which runs from late December until late January, was 161,000 barrels per day (bpd) last year. The West Karoun oilfields produced 305,000 bpd for the same time period this year, Zanganeh said. Also, OPEC (Organization of the Petroleum Exporting Countries) members are likely to stick to production limits through the end of 2018, Zanganeh said. OPEC and non-OPEC producers led by Russia agreed last November to extend oil output cuts until the end of 2018.

Source: Reuters

China plans crackdown on oil refiners' unofficial capacity growth

January 26, 2018. China’s NDRC (National Development & Reform Commission) said it will launch a fresh crackdown on oil refiners that expand capacity without official approval, the latest sweeping move by Beijing to curb unfettered growth in fuel output and illicit oil trade. NDRC said it will close refineries with less than 2 million tonnes per year (40,000 barrels per day) of capacity if they are found to violate regulations. The penalty for larger refineries will be to curb any expansion projects. Even so, China’s refineries have been churning out and exporting bumper volumes of diesel and gasoline, in a race for profits.

Source: Reuters

Russia remains China's largest oil supplier for 10th month

January 25, 2018. Russia held firm as China’s top crude oil supplier in December for the 10th month and racked up its second year as the No.1 supplier to China in 2017, the data from the General Administration of Customs showed, leaving rival exporter Saudi Arabia in second place once more. Shipments from Russia hit 5.03 million tonnes in December, down 0.2 percent from a year earlier, pushing up its full-year supply by 13.8 percent to 59.7 million tonnes, or 1.194 million barrels per day (bpd). Saudi Arabia’s December shipments were up 31.7 percent from a year ago at 4.71 million tonnes, or about 1.11 million bpd. Whole-year shipments from the Kingdom, OPEC (Organization of the Petroleum Exporting Countries)’s top supplier, grew 2.3 percent to 52.18 million tonnes, or 1.044 million bpd, the data showed.

Source: Reuters

Blackstone to invest in Norwegian oil startup Mime Petroleum

January 25, 2018. Private equity firms Blackstone and Blue Water Energy LLP will together invest up to $1 billion in Norwegian oil startup Mime Petroleum, the companies said. Founded last year, Oslo-based Mime will focus on buying stakes in oilfields off Norway to drive value via production optimization, new developments and near-field exploration.

Source: Reuters

INTERNATIONAL: GAS

Canada LNG project developers trim list of FEED contenders

January 30, 2018. Four engineering, procurement and construction (EPC) contractors have advanced to the shortlist of bidders vying to perform front-end engineering and design (FEED) work on the proposed Kwispaa LNG (liquefied natural gas) project in British Columbia, Steelhead LNG and Huu-ay-ah First Nations announced. Steelhead LNG stated that invitations to tender should be issued during Second Quarter 2018. Afterward, the project developers will select two successful bidders to carry out the FEED phase beginning in the subsequent quarter. The Kwispaa LNG FEED includes “At-Shore LNG” topsides, onshore power station, pre-treatment and balance of plant components, according to Steelhead LNG. According to Steelhead, each At-Shore unit will boast up to 6 million tonnes per annum (mtpa) of LNG production capacity with approximately 280,000 cubic meters of integrated LNG storage. Hyundai Heavy will collaborate with successful EPC contractors to execute FEED studies, the company said. Proposed for a location on Huu-ay-aht First Nations land at Sarita Bay on the west coast of Vancouver Island, Kwispaa LNG is licensed to export up to 24 mtpa of LNG for 25 years. The project, originally proposed under the name “Steelhead LNG,” will receive natural gas supplies from northeastern British Columbia and northwestern Alberta via new and existing pipelines. It is slated to begin initial production of 12 mtpa in 2024, according to Steelhead LNG, which is co-developing the project with the Huu-ay-aht First Nations.

Source: Rigzone

China adjusts domestic reference prices for tax rebate in gas imports

January 30, 2018. China announced retroactive adjustments in reference prices for importers to use as a base for tax rebates, part of a long-standing policy started in 2011 to give importers some respite on tax payments. Reference prices for liquefied natural gas will be set at 26.64 yuan ($4.21) for each Joule (GL), retroactive from October 1 of last year, and pipeline gas at 0.94 yuan per cubic metres, according to the finance ministry. Between July and September last year, LNG reference prices were set at 27.49 yuan per GL and pipeline gas at 0.97 yuan per cubic metre.

Source: Reuters

Iran ready to seek arbitration in Turkmenistan gas row

January 29, 2018. Tehran is ready to file a case with the International Court of Arbitration (ICA) over the quality and price of gas it receives from Turkmenistan, the Iranian oil minister said, as a dispute between the two nations over payments escalates. The Central Asian nation stopped gas exports to Iran in January 2017, saying it was owed $1.5 billion to $1.8 billion for gas it had delivered to Iran. Iran, which disputes the claim, has imported Turkmen gas since 1997 to supply its northern region, especially in winter, even though it has large gas fields in the south of the country. Iranian Oil Minister Bijan Zanganeh said Iran was ready to take the dispute over price to the International Court of Arbitration. The National Iranian Gas Company (NIGC) had said in December that Tehran would prefer dialogue to resolve the disputes rather than resorting to international arbitration.

Source: Reuters

Bangladesh signs deal with Indonesia for LNG imports

January 28, 2018. Bangladesh signed an agreement with Indonesia to import liquefied natural gas (LNG), as the South Asian country turns to the supercooled fuel to fill a shortfall of domestic natural gas. A letter of intent was signed between two state energy companies, Petrobangla and Pertamina, after a meeting between Prime Minister Sheikh Hasina and Indonesian President Joko Widodo. Bangladesh, a country of more than 160 million people, may import as much as 17.5 million tonnes of LNG (liquefied natural gas) a year by 2025, as its domestic gas reserves dwindle and demand grows. Petrobangla is finalising several floating storage and regasification units, the first of which is expected to commence operations in April 2018.

Source: Reuters

JAPEX to book $608 mn impairment loss on its shale gas project for third quarter

January 26, 2018. Japan Petroleum Exploration Company Ltd (JAPEX) said it would book an impairment loss of C$750 million ($608 million) on its shale gas project in Canada in the October-December quarter. The loss will hurt its net income in the April-December period by 34 billion yen ($311 million), but the company is still assessing an impact on its full-year earnings, JAPEX said.

Source: Reuters

INTERNATIONAL: COAL

Taiwanese coal trader suspected of buying from North Korea

January 30, 2018. Taiwan has detained a local businessman on suspicion of buying coal from North Korea in violation of United Nations sanctions, prosecutors said. A Taiwanese man surnamed Chiang allegedly carried anthracite from North Korea on a vessel hired through mainland China last August and September, with the cargo sold in open waters off Vietnam. Prosecutors also said three others were being investigated on suspicion of forgery and violating laws on terrorism financing, and have been released on bail.

Source: The Japan News

China coal futures hit record high as utilities warn of shortages

January 29, 2018. China’s thermal coal futures hit record highs after four top utilities warned of potential heating and electricity shortages and as the worst blizzards this winter continued to blast some central and southern provinces. China’s State Power Investment Corp, China Datang Corp, China Huaneng Group and China Huadian Corp asked the government to boost supplies of coal and temper a months-long rally in prices. Thermal coal futures have jumped over 10 percent this year, extending a months-long rally, as utilities rush for supplies to deal with soaring power demand as cold weather sweeps across swathes of the nation.

Source: Reuters

China's Hebei province to cut coal use by 5 mt this year

January 27, 2018. China’s northern Hebei province plans to reduce its annual coal consumption by 5 million tonnes (mt) this year by promoting the use of clean and renewable energy. The smog-plagued province has already cut coal consumption by 44 mt between 2013 and 2017. This year, Hebei authorities will continue developing the province’s central heating system, and promote the use of gas and electricity for heating in rural areas as a substitute for coal.

Source: Reuters

Indonesia considers using coal to set consumer power prices

January 26, 2018. Indonesia is considering using local coal benchmark to set prices for electricity for consumers, the country's Energy and Mineral Resources Minister Ignasius Jonan said, to reflect the main fuel source in the country's energy mix. Consumer electricity prices are currently calculated based on the Indonesian Crude Price (ICP) Change being considered because approximately 60 percent of Indonesia's power produced with coal, and this unlikely to change until 2025, Jonan said.

Source: The Economic Times

Murray Energy to acquire stake in five Kentucky coal mines

January 25, 2018. Murray Energy said that its subsidiary Murray Kentucky Energy has agreed to acquire a stake of 51% in a new company that will own certain coal assets formerly held by Armstrong Energy in Western Kentucky. The remaining stake of 49% in the new company will be owned by secured noteholders of Armstrong Energy. According to Murray Energy, the new company will produce low-chlorine, high-sulfur thermal coal with five mines in the Illinois Basin. The five coal mines were owned by Armstrong Energy, which had applied for bankruptcy in November 2017. As of 30 June, 2017, the company had controlled more than 445 million tons of proven and probable coal reserves in Western Kentucky. Murray Energy said that the new company will also be the owner and operator of three existing coal processing facilities, river dock coal handling and rail loadout facilities. After completion of the transaction, the mines will be managed by Murray Kentucky along with the coal preparation and shipment facilities.

Source: Energy Business Review

INTERNATIONAL: POWER

EU provides record funding for a France-Spain power link

January 25, 2018. The European Union (EU) is to provide €578 million ($717 million) to build a power link between Spain and France to carry excess Spanish renewable energy and ease one of Europe’s worst network bottlenecks. Construction of the 370 kilometre (230 mile) Franco-Spanish subsea power cable across the Bay of Biscay, west of the Pyrenees mountain range, will nearly double current power exchange capacity to 5,000 MW.

Source: Reuters

INTERNATIONAL: NON-FOSSIL FUELS/ CLIMATE CHANGE TRENDS

Taiwan demands compensation for US solar safeguard tariffs

January 30, 2018. Taiwan has joined South Korea in demanding compensation for steep US (United States) tariffs on solar panels, opening a 30-day window for negotiations, a World Trade Organization filing showed. US President Donald Trump signed into law a 30 percent tariff on imported solar panels, billed as a way to protect American jobs but which the solar industry said would lead to layoffs and raise consumer prices. It was among the first unilateral trade restrictions imposed by the administration as part of a broader protectionist agenda that has alarmed Asian trading partners producing cheaper goods. Taiwan, with no fossil fuel resources but a booming tech sector, says it ranks as the world’s second largest solar cell manufacturing base after China, putting it at the heart of an industry caught up in a global trade battle. The US, India and China are all racing to develop their solar industry, a huge growth area as the world moves toward environmentally friendly sources of energy, and are engaged in legal fights to keep their firms in pole position. The US has alleged that China and India are giving their solar sectors an illicit leg-up, and last week Trump resorted to “safeguard” tariffs, effectively shielding US solar manufacturers from foreign competition.

January 30, 2018. Covanta’s Rookery South Energy Recovery Facility, a waste-to-energy project in the UK has secured an environmental permit by the United Kingdom (UK) Environment Agency (EA). Issuance of the permit follows a detailed review and consultation process by the EA. The Rookery project, located in Bedfordshire, UK, will convert over 500,000 tonnes of residual waste per year into approximately 60 megawatts of low carbon energy - enough electricity to meet the needs of 75,000 homes. Site preparation work has begun with full construction anticipated to follow by mid-2018, in conjunction with financial close. The project is expected to be fully operational in 2021.

Source: Energy Business Review

Westinghouse expands Ukraine presence with new nuclear fuel deal

January 29, 2018. Westinghouse Electric Co signed an agreement to deliver nuclear fuel to seven of Ukraine’s fifteen nuclear power reactors between 2021-2025, and will source some fuel components locally, Westinghouse said. Owned by Toshiba Corp, Westinghouse said the deal would help Ukraine diversify its energy supplies. The deal builds on an existing agreement to supply six reactors, which was set to expire in 2020. Kiev’s pro-Western government wants to wean Ukraine off a traditional dependence on Russia for energy supplies, including gas imports and nuclear fuel.

Source: Reuters

France rules out increasing CO2 as it closes nuclear reactors

January 26, 2018. France will not increase carbon emissions as it reduces its reliance on nuclear energy in coming years, Junior Energy and Environment Minister Sebastien Lecornu said. The centrist government of French President Emmanuel Macron has launched a year-long debate about energy policy before deciding in early 2019 on the future share of nuclear energy in France’s power production. It now stands at 75 percent. To assist discussions, grid operator RTE has prepared scenarios for cutting nuclear energy’s share from 56 percent to 11 percent by 2035, and an additional scenario on reducing nuclear reliance to 50 percent by 2025. Environment activists complain that the government has withheld scenarios cutting back nuclear capacity the most, when it held workshops this month to prepare for the public debate. France would not build more plants powered by coal or fuel oil, he said, but said the government would consider whether there was a role for gas, which has lower emissions than coal or other fossil fuels. Sustainable energy advocacy group NegaWatt said the most ambitious scenarios for reducing nuclear reliance could be achieved without boosting CO2 emissions provided there was a stronger focus on energy efficiency and if the nuclear reactors had their lifespans’ extended a little beyond 40 years. The majority of EDF’s nuclear reactors were connected to the grid between 1980 and 1990. Closing them all promptly after 40 years, their scheduled lifespan, would cut so much capacity that France would have to build new gas plants to fill the gap. EDF wants to extend the lifespan of its reactors to 50 years, but will need approval of nuclear regulator ASN for each reactor. The ASN has said it will rule on the principle of lifespan extensions in 2021.

Source: Reuters

Shell buying spree cranks up race for clean energy

January 26, 2018. Royal Dutch Shell has spent over $400 million on a range of acquisitions in recent weeks, from solar power to electric car charging points, cranking up its drive to expand beyond its oil and gas business and reduce its carbon footprint. The scale of the buying spree pales in comparison to the Anglo-Dutch company’s $25 billion annual spending budget. But its first forays into the solar and retail power sectors for many years shows a growing urgency to develop cleaner energy businesses. The investments are not limited to renewables such as biofuels, solar and wind. Shell, as well as rivals such as BP, Exxon Mobil and Chevron, are betting on rising demand for gas, the least polluting fossil fuel, to power the expected surge in electric vehicles in the coming decades.

Source: Reuters

SunCoke, Cokenergy reach $5 mn settlement over emissions

January 26, 2018. SunCoke Energy Inc and Cokenergy LLC have agreed to pay a $5 million penalty to resolve alleged US (United States) air pollution violations from their plant in East Chicago, Indiana, the US Justice Department said. The settlement, which also requires the companies to rebuild their coke ovens to fix leaks, will result in annual emissions cuts of 680 pounds (308 kg) of lead, and nearly 1,900 pounds (862 kg) of sulfur dioxide and other pollutants, the department said. The ovens convert coal into coke, a fuel used in blast furnaces in iron ore smelting. Lead pollution harms brain function in children and can cause other health problems. Sulfur dioxide is a particulate that can harm human lungs and hearts. The companies will pay the $5 million fine in equal amounts to the US federal government and the state of Indiana, the department said.

Source: Reuters

SunPower puts US expansion on hold over Trump tariff

January 26, 2018. SunPower Corp said it was putting a $20 million US (United States) factory expansion and hundreds of new jobs on hold until and unless its solar panels receive an exclusion from federal tariffs the Trump administration imposed. President Donald Trump’s decision to impose tariffs on cheap imported panels was intended to protect American manufacturing jobs, but many in the solar industry have argued that tariffs will raise costs and trigger thousands of layoffs in the installation end of the industry. SunPower’s project development arm has already lost business to rival First Solar Inc, which makes panels that are exempt from tariffs.

Source: Reuters

US EPA ends clean air policy opposed by fossil fuel interests

January 26, 2018. The Trump administration announced it is doing away with a decades-old air emissions policy opposed by fossil fuel companies, a move that environmental groups say will result in more pollution. The United States (US) Environmental Protection Agency (EPA) said it was withdrawing the “once-in always-in” policy under the Clean Air Act, which dictated how major sources of hazardous air pollutants are regulated. Under the EPA’s new interpretation, such “major sources” can be reclassified as “area sources” when their emissions fall below mandated limits, subjecting them to differing standards. The EPA said the policy it has followed since 1995 relied on an incorrect interpretation of the landmark anti-pollution law. John Coequyt, who leads climate policy initiatives for the Sierra Club, said the move will lead directly to dirtier air and more deaths.

Source: The Japan Times

SMA Solar sees US duties making only small dent in market

January 26, 2018. SMA Solar, Germany’s largest solar group, expects the industry to take a just a small hit from import tariffs imposed by US (United States) President Donald Trump, sending its shares to an 11-week high. Trump approved a 30 percent tariff on solar cell and module imports, dropping to 15 percent within four years. Up to 2.5 GW of unassembled solar cells can be imported tariff-free in each year. Although the move was intended to help American manufacturers, some in the sector said it could slow US investment in solar power and cost thousands of US jobs. However, SMA Solar, the world’s largest maker of solar inverters, said it expected the impact to be small, forecasting industry growth in the Americas region would average about 18 percent per year until 2020, more than the 10 percent expected globally. The US government argued that its domestic manufacturers could not compete with what it said were artificially lower-priced Asian solar panels.

Source: Reuters

Japan's $1.8 bn solar project advances with addition of five new participants

January 25, 2018. A 480 MW solar project, which will be built with an investment of approximately JPY200 bn ($1.8 bn) in Japan, has achieved progress with the joining of five new companies. In 2014, Kyocera, Kyudenko and Mizuho Bank agreed to jointly assess the feasibility for the construction the large-scale solar project on agricultural land on Ukujima island, Nagasaki. The participation in the project has now been expanded with the addition of five other companies including SPCG Public, Tokyo Century, Furukawa Electric Company, Tsuboi, and The Eighteenth Bank. The plan to develop the project was initially proposed by Photovolt Development Partners (PVDP) in April 2013 in a bid to help contribute to environmental protection and economic revitalization on the remote island. Kyocera said that the feed-in tariff (FIT) rights from PVDP will be transferred to a newly established special purpose company Ukujima Future Energy Holdings. The partners are planning to commence the construction of the project in 2019. The project will feature approximately 1,650,000 Kyocera high-output multicrystalline silicon solar modules.